Buying or selling a home can be complicated enough but add in the lingo and you may feel like you are listening to a foreign language. Here are a few real estate terms decoded.
Assessed Value- Assessed Value is the valuation placed on property by a public tax assessor for purposes of taxation.
Closing Costs –Closing costs are all of the miscellaneous expenses paid by the buyer and the seller when a real estate transaction closes. These costs can include real estate commission, mortgage fees, attorney fees, transfer taxes, recording fees, and title insurance.
CMA –CMA is short for comparative market analysis or competitive market analysis. A CMA compares the prices of homes sold, homes currently on the market and homes pending to a subject property. A CMA may be prepared for a buyer or a seller to determine market value. The CMA accounts for style, size, location and other factors that make the homes comparable.
Contingency – A contingency is a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met. Common contingencies are a buyer's contractual right to obtain a professional home inspection before purchasing the home or obtain mortgage financing.
Deed-The deed is the legal document conveying title to a property.
Earnest Money Deposit- The earnest money deposit is a deposit made by the potential home buyer to show that he or she is serious about buying the house. This is typically made at the time of the offer to purchase.
Lock Box – A lock box is a secure key-holding device. It is used to hold a key for a home that is for sale. This allows cooperating real estate professionals to gain entry into the home. Entry is usually granted after obtaining permission from the listing agent or office.
MLS – The MLS or Multiple Listing Service is an organization that collects, compiles and distributes information about homes listed for sale. Real Estate brokers are members of the MLS. Membership is not open to general public. The MLS is used for real estate professionals to share information about homes for sale to other agents. MLS boards are local or regional. There is no nationwide MLS.
Short Sale- A short sale is when the seller arranges with their mortgage lender to accept a price that's less than the amount they owe on the property. The lender typically agrees to forgive the rest of the loan. A short sale arrangement is made between the seller and the mortgage lender.
Title Insurance – Title insurance is an insurance policy that protects the lender's or owner's interest in real property. Title insurance as it is named protects against claims against the title or from unexpected or fraudulent claims of ownership. Buyers typically pay to pay for the lenders title insurance policy as part of the closing costs.